2014 (1) TMI 98 - AT - Service Tax

Denial of cenvat credit on various input services Waiver of Pre-deposit Held that - Following M/s SANMAR FOUNDRIES LTD VERSUS COMMISSIONER OF CENTRAL EXCISE, TRICHY 2013 (7) TMI 340 - CESTAT CHENNAI The Tribunal granted waiver of dues on services other than Rent-a-cab service - in respect of Rent-a-cab service, the Tribunal observed that as the amount was recovered from employees, there was no reason to claim Cenvat credit on such amount Assessee directed to deposit Rupees Ten thousand as pre-deposit upon such submission rest of the duty to be stayed till the disposal Partial stay granted.

Summary

Issues:
- Denial of CENVAT credit for input services including Management, Maintenance and Repair Service of helicopter, Rent-a-cab service, and Management and Consultancy Service.

Analysis:
The judgment by the Appellate Tribunal CESTAT CHENNAI involved the denial of CENVAT credit to the applicants engaged in the manufacture of steel casting for various input services. The demand raised amounted to Rs.18,66,451.00 along with interest and penalty. The specific input services in question were the Management, Maintenance and Repair Service of a helicopter owned by the company, Rent-a-cab service, and Management and Consultancy Service.

Upon hearing both sides and examining the records, the Tribunal noted that a similar issue had been addressed in the applicant's own case previously. In that case, waiver of dues was granted for services other than Rent-a-cab service. Regarding Rent-a-cab service, since the amount was recovered from employees, the Tribunal found no basis for claiming CENVAT credit on that amount. However, for Management Consultancy Service provided by the Chairman, the Tribunal considered the fee collected for financial management and policy decisions, with service tax paid. The absence of a separate agreement with the Chairman was highlighted by the counsel.

Taking into account the previous order and the recovery of a portion of expenses on Rent-a-Cab from employees, the Tribunal directed the applicant to make a pre-deposit of Rs.10,000 within 4 weeks. Upon this deposit, the pre-deposit of the remaining dues from the impugned order was stayed during the appeal process. The compliance deadline was set for reporting on 13.6.2013, with the decision being dictated and pronounced in open court.